Title: Circular Economy in Vietnam's Small and Medium-Sized Enterprises: Assessment of Current Practices, Barrier Analysis, and Strategic Policy Directions (2020-2025)
Authors: Tam Tran Ngoc Minh, Ngan Nguyen Thi Thuy
Volume: 10
Issue: 1
Pages: 24-32
Publication Date: 2026/01/28
Abstract:
The transition to a Circular Economy (CE) has become essential for Vietnam as the country pursues its net-zero commitment by 2050, yet the readiness and capability of small and medium-sized enterprises (SMEs) which form the backbone of the national economy remain unclear. This study aims to assess the status, barriers, and strategic pathways for CE adoption among Vietnamese SMEs. A scoping review of 188 scientific publications and authoritative datasets from the World Bank, OECD, UNDP, and VCCI was conducted, supplemented by policy analysis of the Law on Environmental Protection (2020), Decree 08/2022/ND-CP on Extended Producer Responsibility (EPR), and the National CE Action Plan. The results show that although Vietnam's regulatory environment has progressed rapidly, CE practices among SMEs remain fragmented due to limited long-term finance, technological constraints, compliance burdens, and underdeveloped secondary material markets. At the same time, emerging business models such as Thanh Long Bioplastics, Lagom Vietnam, and ReForm Plastic demonstrate the potential for innovation when local resources, partnerships, and dynamic capabilities align. The study concludes that advancing CE adoption will require an integrated strategy focused on strengthening institutional clarity, expanding green financing instruments, enhancing technological ecosystems, and developing formal markets for secondary resources, thereby enabling SMEs to play a transformative role in Vietnam's circular and low-carbon development pathway.